Sahara-Sebi saga: Apex court has reasons to be vexed with Subrata Roy's histrionics

The Supreme Court is, justifiably, annoyed at corporate India’s biggest Samudra Manthan (read a do-or-die slugfest) between billionaire Subrata Roy and Securities and Exchange Board of India (Sebi), each claiming the other is wrong.

Sahara Group chief Subrata Roy.

And it has stretched for a little over three and a half years.

The self-styled banker for the poor, who has penned the first of a trilogy listening to morning ragas from celebrated flutists and classical singers from his cell in Delhi’s maximum security Tihar prison, has offered - once again - some payment options but not cash.

Instead, through the book, Roy has asked: "Why me? What have I done to deserve this?"

Roy has always played to the gallery, often acquiring a larger than life image. He once paid salaries to the family members of soldiers who died in the Kargil War. The nation saluted him, he was almost like the government.

Hours before he had walked into Tihar - the decision shocking millions of his supports who consider him god and follow his orders of a Hail Ceaser salute - Roy had even told a Supreme Court judge that he got delayed coming to the apex court because he had to attend his ailing mother. After all, the scrolls of epic Ramayana had described the mother as the one important that the nation itself.

But now, it seems, the days of histrionics are all over for Sahara.

Probably tired of Sahara’s repeated claims, the judges wanted one simple answer: When will the cash be on the table?

Sahara, true to its style, has not offered a genuine answer but raised, for yet another time, what many claimed was a banner of hope. The new sale list has the conglomerate’s proposal to offload its stake in Force One team in the Formula One, sale of a few small aircraft still owned by the company for family and official use and outright sale of the Sahara Star Hotel in Mumbai, whose bar once earned praise from none other than the legendary PRS “Bikki” Oberoi. This, in total, would fetch the group Rs 3,000 crore. Another deal - almost on the table - with an undisclosed buyer from Qatar for the famed Grosvenor House would fetch an additional Rs 2,500 crore. Sahara claimed apart from overseas assets, it was also selling and pledging land across India.

But the bench of Chief Justice TS Thakur, Justices AR Dave and AR Sikri remained extremely wary of the proverbial slip between the cup and the lip, expressing its disappointment at efforts by Sahara, which was directed by the apex court to deposit Rs 5,000 crore in cash and an equal amount in bank guarantee by 31 August 2012. Probably tired of Sahara seeking repeated extensions for raising the cash from its assets, the judges even refused permission to the group to use special facilities in Tihar for wooing investors.

There is a lot of cash at stake. With interest, Sebi claims the group’s dues have swelled to over Rs 40,000 crore due to mounting interest liabilities. Sahara continues to argue that its liabilities are less than Rs 2,000 crore. In 2015, Sebi had even requested the apex court to appoint a receiver to dispose of the Sahara properties, even suggesting the name of former top judge BN Agarwal to oversee the attachment and sale of the assets.

The money was to be paid to people who had invested in two Sahara schemes that the regulator and court declared illegal.

In 2012, the apex court had ordered the two Sahara group entities to repay to 29.6 million investors over Rs 24,029 crore, along with 15 percent interest. Sahara initially paid around Rs 5,120 crore, claiming it paid most investors in cash.

But there are other contentious issues gripping the embattled company. In a recent report, the daily Mint said Sahara had funnelled cash from small savers to fund Aamby Valley, its luxury resort south of Mumbai dotted with man-made lakes and an airport and favoured by business tycoons, Bollywood stars and top cricketers.

The daily said Sahara ploughed at least Rs.15 billion from two of its credit cooperatives into the resort project through investments in preference shares. And some investors in its credit cooperatives complain they have struggled to get Sahara to pay out their matured time deposits - even for sums as low as Rs 30,000. Sahara, however, claimed the process was not illegal and its investors would not face any financial hiccups. But market experts told the newspaper that members of the cooperatives might face difficulty recouping their money if Aamby Valley is monetised and the proceeds are given up to the investors of the earlier financial schemes.

It is the continued game of claim versus counter claim that is bothering the country’s apex court which, probably, doesn’t want any more papers or plans but a final settlement from Roy, who once sent truck loads of documents to the Sebi office in the dead of night to prove his payments to investors were genuine.

Sebi is stuck on its stand of cash-first-then-peace, it has not even commented on the papers it received from Roy.

And the court -- probably -- wants a new set of trucks from Sahara to reach Sebi’s office. It must not carry papers but loads of cash. Only then Roy would walk out from his frugal life to a gold-plated luxury at his palace, get back his face value.